Cardiovascular Systems, Inc.

Hello everyone and welcome to the cardiovascular system first quarter earning conference call. My name is Juan and I will be coordinating your call today. If you would like to ask a question during the presentation, you may do so by pressing star one on your telephone keypad. If you have joined us online, you can press the flag icon on your web browser to ask a question. I will now hand over to your host, Jack Nielsen, to begin. Jack, please go ahead.

Thank you, Juan. Good morning and welcome to our fiscal 22 first quarter conference call. With me today are Scott Ward, CSI Chairman, President, Chief Executive Officer, Rhonda Robb, Chief Operating Officer, Jeff Points, Chief Financial Officer, and Dr. Ryan Eglin, Chief Medical Officer. This quarter we moved our earnings call to the morning in order to avoid the multitude of med tech companies reporting quarterly results after the market close. It's our hope that this new time slot is more convenient and results in fewer scheduling conflicts for you. Approximately three hours ago, we issued a press release announcing first quarter results. You may find a copy of this release on the investor relations section of our corporate website. Here you may also find an earnings supplement that includes additional details on our performance and outlook. In a few moments, CSI management will discuss results for the first quarter ended September 30th, 2021. After our prepared remarks, we will entertain your questions. During today's call, we will make forward-looking statements. These forward-looking statements are covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and include statements regarding CSI's future financial and operating results or other statements that are not historical facts. Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those described in our most recent Form 10-K and subsequent quarterly reports on Form 10-Q. In particular, the COVID-19 pandemic has created risks and uncertainties for our business, results of operation, financial condition, and prospects, which we will discuss on this call. CSI disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments, or otherwise. We will also refer to non-GAAP measures because we believe they provide useful information for our investors. Today's press release contains a reconciliation table to GAAP results. I will now turn the call over to Scott Ward.

Thank you, Jack. Good morning, everyone, and thank you for joining us today. Today we reported Q1 revenue of $58.4 million, a decline of 3.6% versus the prior year. Consistent with the 8K notice that we issued in September, our procedure volumes were adversely impacted by hospital capacity constraints caused by the COVID Delta variant. The resurgence of COVID and the related staffing shortages disrupted referral patterns and had the largest impact on our procedures that are deemed to be more elective, such as the treatment of patients with lower acuity peripheral claudication. The severity and duration of the COVID impact was greater than expected and was more pronounced due to the timing and geographic location of the Delta surge. Our procedure volumes in first quarter tend to be heavily weighted towards September. However, this year, ICU capacity was severely constrained throughout the South and the Southeast region of the United States, which typically represents more than 50% of our revenue. We do expect that some of these procedures will be recovered, and we are encouraged by improvement in recent trends, but the pace of the recovery is difficult to predict due to the dynamics of the Delta variant and the new variable introduced by staffing shortages. As a result, we are uncertain whether the COVID recovery will be in Q2 or later in the second half of our fiscal year. The financial guidance that we issued on August 4th did not contemplate an impact from COVID. Because the waves of outbreaks experienced in fiscal 21 caused transient sales declines, which were followed by a recovery, and then more normalized sales trends over the full 12-month period. We anticipated that we would experience a similar trend in fiscal 22. However, in the first quarter, the negative impact due to the Delta variant was larger than anticipated, and we do not expect this impact to normalize over the remainder of the fiscal year. Although COVID remains the most important factor that is negatively impacting our business, We are also responding to an increasingly competitive environment with new products and new players entering our markets. And following the recent issuance of the physician fee schedule, we are anticipating increased economic pressure for our customers who perform PVI procedures in the office-based lab setting. And of course, this may cause a temporary disruption in the market as well. As a result, we have reduced and widened our fiscal 22 revenue guidance to reflect the uncertainty associated with our current revenue outlook. Despite the COVID impact, we are encouraged by the progress we are making in our commercial programs and our efforts to broaden our revenue streams. In a few moments, Rhonda will provide an update on our commercial developments, and then Dr. Ryan Egland will address our recent announcement regarding our first in human experience with CVT's Coronary Everolimus Drug-Coated Balloon. But first, Jeff will provide details regarding our financial results and guidance. Jeff.